SunbitsSass Peress – CEO of ICP Solar – Solar Blog

By now many of you have read today’s announcement about operational efficiencies at ICP Solar. Its quiet obvious to me that while we add business left, right and center, to our bookings for next year, it is incumbent on me to bring this company to profitability, as deserve our shareholders to receive a return on their investment.
It is indeed a challenging financial environment, yet we are lucky to have set down some good developments in 2008 which are going to catch big waves in 2009. Our cost of product acquisition will fall drastically as will our cost of operations, thanks to the addition of David Stein. His history at Future Electronics has already helped us shaves several dollars on the costs of new products about to be introduced and his savvy operational sense is helping to make us a leaner and faster acting company.
It reminds me a bit of the ICP Solar of old, where delivery and operational efficiencies were as much a focus as topline sales. We had extraordinary internal people as well as extraordinary sales team members. I am seeing quite a bit of that in this year, and with the added innovations about to be launched, I am very very bullish on the upcoming period.
And all this in the most challenging economic environment we have ever seen…go figure!
Sass

OK, so I am going to assume that you’ve all read about the deal with Ibersolar, Spain’s #4 solar energy company, whereby ICP Solar takes it over in what should is a carefully calculated risk to enable ICP Solar to become a world player in solar energy and Ibersolar access to capital through our public entity, together with technologies (IP) that we own.
This is a deal which is dependant on funding, so I must caution with that note. However, when you look at the fundamentals, it is a huge potential gain for ICP and Ibersolar together. We have like-minded management and both deal with the same vendors. The combined purchasing power, sinergies in marketing and ability to now offer complete home kits will surge ICP far beyond where it could go on its own.
For Ibersolar, the opportunity to gain our marketing power, innovative technologies and North American presence all present just some of the benefits to them.
I never promised you a boring ride…
Sass

A funny thing happened on the way to the bank…they aren’t lending anymore! Consumers are nervous about their jobs, so guess what that does to discretionary expenses..they disappear. Holidays, dinners out, everything that you don’t really NEED, goes out the window for a while, for middle class families, until such time as they feel secure again.
We have the perfect storm which hit the world markets and are still being felt across the globe. We have loose rules in the USA which created sub-par mortgages on homes not worth a fraction of what was being lent against them. And we have governments trying not to look panicky, although some presidential candidates were ready to throw in the towel and call off their campaigns just two weeks ago.
Luckily for all of us, this is not the 1930’s, where the reaction time was too slow to avoid a great global depression. Governments have reacted strongly, albeit a bit late, to the major issues facing banks and will fund us out of a recession. They permitted the banks to flood the markets with capital without regulations and now they are basically flooding the banks with money to back up those stupid decisions, once again in the hope that rising sentiment will become a self-fulfilling prophecy.
What does this mean for our industry? Well if we can continue to make the case for money saved, we win. If we use carbon savings (without accompanying credits), its a tougher case to make in today;s reality. People need to see real savings in their pocketbooks. Surely, incentives, subsidies and net metering will lead many to continue to covet solar systems, yet those on the edge, will now fall off, until such time as ROI calculations come down.
Expect falling prices in our industry to become the norm as oversupply hits us in 2009. I also expect that in the current turbulence of world markets, with capital being squeezed, you’ll see some smaller players bought up by bigger ones.
Hold on, its going to be a bumpy solar ride!
Sass

Now that oversupply is just around the corner, for solar cells and everything upstream, where does it take the industry?
Consolidation, price reductions and market share attacks are what are to be expected of traditional commodity product or commodity service players. Those who have little distinction will be the ones to feel the biggest brunt of this pain, and in that category its best to count those who are most exposed to such crisis, the least vertically integrated. The ones who have no buffer room, no economies of scale to match the big boys and no distinctive advantage will be hurt. Who will be helped?
In times of such movements, it is the ones that have the cash to absorb, the market share drives to gain, the distinction in products to sustain pricing and the aggressive to pursue opportunities that will cost less as players are bought up or fall down.
ICP Solar is well placed in this situation, because of our distinction and aggressive pursuit of new clients. As reported in previous financial documents, we are gaining new clients at record rates and the change from a split personality (manufacturing and intellectual assets) to focus simply on intellectual property in marketing and product innovation, is well underway. With significant product launches in the coming months thanks to large development investments in personnel and product in the past few, we look to 2009 with a very clear message to the entire industry: Distinguish yourself or perish.
Sass